Gordon Brown has admitted mistakes in regulating the banks, accusing the City of lobbying against greater scrutiny before the financial crisis plunged Britain into recession.

Brown had previously blamed the scale of the recession mainly on the international financial crisis and the refusal of other countries to agree to tighter international surveillance of the banks.

In an ITV interview due to be broadcast tonight, Brown admits he had been influenced by bankers' lobbying.

"In the 1990s, the banks, they all came to us and said, 'Look, we don't want to be regulated, we want to be free of regulation.' ... And all the complaints I was getting from people was, 'Look you're regulating them too much.'

"The truth is that globally and nationally we should have been regulating them more. So I've learnt from that."

Brown said he had been under pressure from the Conservatives to make the regulation even lighter. He told ITV's Tonight programme: "You don't listen to the industry when they say, 'This is good for us.' You've got to talk about the whole public interest.

"And so we are tougher on the banks and tougher on the way they behave and we can be relied on to make sure the banks act in the national interest."

Opposition parties seized on his admission today. Vincent Cable, the Liberal Democrats' Treasury spokesman, said it was not enough just to apologise.

Speaking ahead of the Lib Dems' manifesto launch, he said: "It's not enough just to hold your hands up and say sorry without having a plan for making sure that the same thing doesn't happen again.

"Gordon Brown's admission that he was swayed by the pleas of the City shows the danger of Tory plans to base economic policy on the wishes of vested interests. The only people that we should be thinking about are the British people and what's best for them.

"The Liberal Democrats have clear plans to break up the banks so that the recklessness of some bankers can never again hold the taxpayer to ransom."

The shadow chancellor, George Osborne, said: "Finally Gordon Brown admits he failed to regulate the bankers and increased taxes on the poor. His next huge mistake would be his jobs tax that will kill the recovery.

"We've had 13 years of his economic mistakes. Britain can't afford five years more."

Ed Balls, who served under Brown in the Treasury, stressed today that a future Labour government would be "much tougher" in the future.

The children's secretary acknowledged that mistakes were made in the regulation of the banks, but insisted that the Conservatives would have been more enthusiastic deregulators.

Speaking at a Labour press conference today, Balls said: "In retrospect, regulation should have been tougher; of course it should have been. All the time when I was financial services minister, I was continuously attacked by some figures in the City but also the Conservative party who said we were being much too tough, much too hard, and we were going to stifle City innovation and creativity.

"We had to get the balance right. I don't think we got that balance fully right. We should, in retrospect, have been tougher on some of the investment banks who didn't really know the risks they were running."